Risk Taking vs. Risk Aversion: What’s Your Best Option?
Former First Lady Rosalynn Carter once said that one “must accept that you might fail; then, if you do your best and still don’t win, at least you can be satisfied that you’ve tried.”
Furthermore, “If you don’t accept failure as a possibility, you don’t set high goals, you don’t branch out, you don’t try — you don’t take the risk.”
But is taking the risk really all that it’s cracked up to be? Is one better off avoiding risk in business and life?
You probably already know the answer to this, but as an insurance agent, who must spend money to make money, it’s important to learn the nuance.
Of course, taking risks is an essential part of finding success. But there is something to be said for risk aversion as well.
When Risk Aversion Works
The problem with risk taking is that it’s often painted as this infallible battle cry among entrepreneurs. As an insurance agent, you’re something of an entrepreneur yourself. You can start to feel pressured to take blind risks simply because it seems like that’s what you should be doing.
Don’t fall for it.
Yes, you’re going to have to take risks. You’ll need to lay it all on the line and follow a course of action to either failure or success. But risk aversion can help you slow down a bit and more carefully weigh difficult decisions.
Insurance agents should be asking the questions, “What are my odds of failure, and what happens next if I don’t succeed?” These questions should be asked BEFORE ever taking the risk!
Therefore, don’t blindly accept all the “lay it on the line” advice that many successful business people will tell you. It’s important to remember that risk proponents like Facebook founder Mark Zuckerberg, who once said that “the biggest risk is not taking any risk,” are more often than not the exception to the rule.
There are far more people out there who failed miserably than the ones, who became billionaires. That may seem discouraging, but it’s not meant to be. That’s just to say that insurance agents can usually not afford to take non-calculated risks.
So You’re Saying, ‘Never Take Risks?’ (No.)
Hopefully you’re not hearing the words “Never take risks,” from the message above. What you should instead take from that is this: always take risks, just make sure that they’re calculated.
What’s so great about calculated risks, you may be asking?
When you take a calculated risk, you see the possible outcomes like a “Choose Your Own Adventure” novel. You know the possibility of failure is there, but you also consider your decisions more carefully, and you likely have a contingency plan or two in place if this action item or that action item doesn’t work out.
You work in a profession where people can buy directly on the Internet — a profession where major players like Google and Walmart are inching a little further into your space every day. You can’t afford to do the same-old/same-old if you want to beat the competition, but you also can’t afford to blow all your resources on the mythological “one big score,” which could mean an overly expensive marketing campaign or an account that drains your time and resources.
As you wrestle with the mandatory nature of risk, do yourself a favor. Start by taking small risks; then when you see a payoff, try to scale those results.
Whatever you do, don’t look at risk aversion as a dirty concept. It can actually be the angel on your shoulder that keeps you out of trouble.
What are some calculated risks you’ve taken that did (or didn’t) pay off in your insurance business? Sound off in the comments section!